Copper miner Antofagasta cuts cost forecast on lower peso, oil

LONDON Feb 23 (Reuters) - Chilean copper producers
Antofagasta cut its production cost forecast for 2015
by 6.6 percent on Monday due to lower oil prices and a weaker
Chilean peso against the US dollar.

The mining company said it expects its net cash cost for
2015 to be $1.40 per pound of copper, about 10 cents per pound
lower than it previously thought and in line with 2014.

"The guidance we provided previously was based on
assumptions we made several months ago, but in light of the
current outlook for the peso and the oil price we have decided
to rebase our assumptions for 2015," Antofagasta chief
executive, Diego Hernandez, said in a statement.

Oil prices have around halved since June last year
benefiting copper miners, for whom energy accounts for about a
fifth of total production costs, according to analysts at
Macquarie.

Antofagasta, controlled by Chile's Luksic family, has also
benefited from a roughly 15 percent tumble since the beginning
of 2014 in the value of the Chilean peso - in which it pays most
of its costs - against the US dollar, the currency used for most
copper sales.

"This is a positive development for the company, more than
offsetting cost pressures from declining grades at key mines. We
expect to see other copper miners in Chile benefit similarly,"
Investec analysts said in a note.

Shares in Antofagasta were down 2.3 percent by 1127 GMT,
almost in line with the UK-listed mining sector.
(Reporting by Silvia Antonioli; editing by Susan Thomas)